5M last year after investor outrage
TORONTO Barrick Gold Corp. unveiled a new compensation package for executives Monday, a year after management faced heavy blowback for a generous signing bonus that made incoming chairman John Thornton one of the highest paid executives in Canada.
The world's largest gold miner said it had scaled back Mr. Thornton's pay for 2013 to US$9.5 million, compared with US$17 million the prior year. Mr. Thornton's original pay package,[url=http://www.sacvanessabruno.fr/]sac vanessa bruno en solde[/url], which included a US$11.9 million signing bonus,[url=http://www.mcmhandbags.in.net/]mcm backpack[/url], caused a rare rejection last year by shareholders of the company's executive compensation plan.
"We heard shareholders loud and clear," said Brett Harvey, Barrick's lead director,[url=http://www.marcjacobshandbags.in.net/]marc jacobs perfume[/url], adding that he saw the new compensation model as one that others in the industry are "going to follow."
The new "scorecard" system will see Barrick pay a large chunk of compensation in stock that executives will have to hold until they retire or leave the company. It will also base salary on a number of performance metrics,[url=http://www.juicycoutureoutlet.us@#$%&/]juicycouture[/url], including delivering planned cash flow, achieving cost targets and meeting earnings expectations. As chairman, Mr. Thornton will not fall under the new scheme. proposed rule to disclose CEO pay ratios could come to Canada
In addition to Mr. Thornton's reduced pay package, Barrick said it awarded outgoing chairman and company founder Peter Munk $3.9 million in 2013, down from $4.2 million in 2012. Chief executive Jamie Sokalsky also saw his pay scaled back to US$7.7 million from US$11.4 million in 2012. The company said it has frozen base salaries for 2014.
Pawel Rajszel, analyst at Veritas Investment Research, said it is unclear whether the changes will be enough to appease Barrick's investors, who were upset last year with what they saw as generous executive compensation for a company that has seen its stock fall by 58% in the past two years.
"The way Thornton's role has been marketed by Barrick is he has all these Asian connections, but the problem with that is, so far we don't see any results, he said. "That could change,[url=http://www.@#$%&-free-running@#$%&/]@#$%& free tr[/url], but investors might be asking questions again."
Shareholders led by seven major Canadian pension funds last year rejected Barrick's executive compensation in a non binding vote at the company's annual general meeting. Barrick stock plunged 45% last year on a string of bad news,[url=http://www.longchamphandbagsoutlet.us@#$%&/]long champ[/url], including a multi billion dollar cost overrun at a mine in Chile and roughly US$14 billion in writedowns. Two independent directors announced surprise departures in December as a result.
Mr. Harvey said he expects the company to pick two new directors after the annual general meeting next month, in addition to four new board members appointed in December.
Barrick is heading into this year's annual general meeting, which will be held on Apr. 30, with more positive momentum compared with last year. The company's shares are up more than 5% year to date and while the company reported a monster US$2.83 billion loss in its most recent quarter, it also announced significant cost savings. Regardless, Barrick has lagged its peers in the gold segment of the Canadian stock exchange,[url=http://www.tiffanyandco.in.net/]tiffany's[/url], which is up more than 25% for 2014.
Barry Schwartz,[url=http://www.michaelkorsoutlet.in.net/]michael kors crossbody[/url], chief investment officer and portfolio manager,[url=http://www.hermes-sac.fr/]sac hermes[/url], said while it remains to be seen how investors will react to the pay levels unveiled on Monday,[url=http://www.giuseppe-zanotti.us@#$%&/]giuseppe's[/url], he sees many of the changes ultimately being welcomed by investors.
"I think all shareholders want to see management have a bigger stake in the game," he said. "They want them to feel the pain if share prices decrease the way they do."
The new compensation package did little to boost enthusiasm for Barrick shares, which finished the day down 2.77%, or 56 cents, to $19.68 a share on the Toronto Stock Exchange.

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